The Chancellor has missed an opportunity to encourage investment in the UK. Comparisons to German productivity sadly missed the point at issue around how businesses grow, develop and incentivise business owners and employees alike.
The UK may still be open for business and is still highly attractive to inbound investment due to low corporation tax rates and “holding company” incentives but, unless your business invests in housing, transport or digital technology, then it is unlikely the Autumn Statement will get you too excited.
Increased infrastructure spending will be funded by further borrowing rather than additional tax. Slow growth and an uncertain economy post Brexit meant the Chancellor’s hands were tied in terms of business give-aways. However, more could have been done to ensure the UK remained competitive in its aim to be the #1 destination for business. Whilst the UK will have the lowest corporation tax rate (17 percent) of the G20, potential increases in employment costs (e.g. through national insurance changes, increases in NMW or changes to salary sacrifice schemes) will be unwelcome.
We already knew that companies will be hit next year by additional tax costs of funding (through restrictions on tax deductible finance costs). There were no new incentives for general capital expenditure and no incentives for building and growing family businesses, in a way that German (Mittelstand) companies are (which also encourages higher productivity). Changes to employment tax will be unwelcome to many businesses and Employee Shareholder Status was dealt a further deathly blow, which will be unpopular with some fast growth enterprises and financial services employers seeking to incentivise key talent. Business and business owners will probably instantly forget the Chancellors first (and last) Autumn Statement. Maybe that was the intention, but the chance to further demonstrate why the UK is the #1 place to do business was also missed.